Risk Assessment Questionnaire Example

Risk Assessment Questionnaire Example

The following questionnaire will help the auditor assess risk. The existence of a condition covered by the questionnaire does not mean errors or fraud have occurred; it is a warning sign indicating increased risk in the audit areas affected. The questionnaire should be modified in accordance with the size and complexity of the entity.

RISK ASSESSMENT QUESTIONNAIRE

This questionnaire should be completed before the start of fieldwork. Its purpose is to document and assess audit risk.

The information required to complete this questionnaire comes from the following sources:

Client responses to our inquiries.

Our knowledge of general and industry economic conditions.

Our knowledge of the client.

This questionnaire is divided into two major sections: “external” and “internal” factors. It is designed so that every “Yes” answer adversely affects risk exposure.

For every “Yes” answer, the item should be referenced to the appropriate audit documentation. The audit documentation should state our assessment of the effect of the condition on the risk of material errors or fraud.

EXTERNAL FACTORS

General Economic and Financial Conditions

[1]. Are there trade or other barriers to the client’s international business? [Y] [N] [Ref]

[2]. Have the client’s domestic markets suffered from high unemployment? [Y] [N] [Ref]

[3]. Have the client’s domestic markets suffered from high inflation? [Y] [N] [Ref]

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